LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Overall LAD gets a fundamental rating of 5 out of 10. We evaluated LAD against 122 industry peers in the Specialty Retail industry. There are concerns on the financial health of LAD while its profitability can be described as average. LAD has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LAD was profitable.
In the past year LAD had a positive cash flow from operations.
LAD had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: LAD reported negative operating cash flow in multiple years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.62%, LAD is in the better half of the industry, outperforming 61.48% of the companies in the same industry.
LAD has a better Return On Equity (12.56%) than 69.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.71%, LAD is in line with its industry, outperforming 59.02% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LAD is below the industry average of 12.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROIC | 5.71% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
With a Profit Margin value of 2.31%, LAD perfoms like the industry average, outperforming 59.84% of the companies in the same industry.
In the last couple of years the Profit Margin of LAD has remained more or less at the same level.
LAD has a Operating Margin of 4.49%. This is in the better half of the industry: LAD outperforms 64.75% of its industry peers.
In the last couple of years the Operating Margin of LAD has grown nicely.
With a Gross Margin value of 15.39%, LAD is not doing good in the industry: 86.89% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of LAD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LAD is destroying value.
The number of shares outstanding for LAD has been reduced compared to 1 year ago.
LAD has more shares outstanding than it did 5 years ago.
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
LAD has an Altman-Z score of 2.50. This is not the best score and indicates that LAD is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of LAD (2.50) is comparable to the rest of the industry.
LAD has a debt to FCF ratio of 116.40. This is a negative value and a sign of low solvency as LAD would need 116.40 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 116.40, LAD is in line with its industry, outperforming 45.08% of the companies in the same industry.
A Debt/Equity ratio of 1.95 is on the high side and indicates that LAD has dependencies on debt financing.
LAD's Debt to Equity ratio of 1.95 is on the low side compared to the rest of the industry. LAD is outperformed by 68.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Altman-Z | 2.5 |
ROIC/WACC0.64
WACC8.93%
2.3 Liquidity
LAD has a Current Ratio of 1.18. This is a normal value and indicates that LAD is financially healthy and should not expect problems in meeting its short term obligations.
LAD has a worse Current ratio (1.18) than 60.66% of its industry peers.
LAD has a Quick Ratio of 1.18. This is a bad value and indicates that LAD is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.31, LAD is doing worse than 70.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
LAD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.64%.
LAD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.64% yearly.
LAD shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.81%.
The Revenue has been growing by 23.35% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
3.2 Future
Based on estimates for the next years, LAD will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.95% on average per year.
Based on estimates for the next years, LAD will show a small growth in Revenue. The Revenue will grow by 7.69% on average per year.
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue Next Year4.76%
Revenue Next 2Y5.5%
Revenue Next 3Y6.43%
Revenue Next 5Y7.69%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.93, the valuation of LAD can be described as very reasonable.
LAD's Price/Earnings ratio is rather cheap when compared to the industry. LAD is cheaper than 86.07% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.04, LAD is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.28, the valuation of LAD can be described as reasonable.
Based on the Price/Forward Earnings ratio, LAD is valued cheaply inside the industry as 90.98% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.64, LAD is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.93 | ||
| Fwd PE | 8.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LAD indicates a somewhat cheap valuation: LAD is cheaper than 64.75% of the companies listed in the same industry.
LAD's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 71.27 | ||
| EV/EBITDA | 8.32 |
4.3 Compensation for Growth
LAD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LAD's earnings are expected to grow with 12.89% in the coming years.
PEG (NY)0.86
PEG (5Y)0.48
EPS Next 2Y12.3%
EPS Next 3Y12.89%
5. Dividend
5.1 Amount
With a yearly dividend of 0.72%, LAD is not a good candidate for dividend investing.
LAD's Dividend Yield is a higher than the industry average which is at 5.04.
Compared to an average S&P500 Dividend Yield of 2.35, LAD's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
On average, the dividend of LAD grows each year by 11.85%, which is quite nice.
LAD has been paying a dividend for at least 10 years, so it has a reliable track record.
LAD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
LAD pays out 6.67% of its income as dividend. This is a sustainable payout ratio.
LAD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP6.67%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
312.94
+3.16 (+1.02%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.69%
Inst Owner Change-0.83%
Ins Owners0.87%
Ins Owner Change-0.52%
Market Cap8.15B
Analysts84
Price Target403.36 (28.89%)
Short Float %6.26%
Short Ratio6.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.67%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.5%
Min EPS beat(2)-1.6%
Max EPS beat(2)6.59%
EPS beat(4)3
Avg EPS beat(4)5.72%
Min EPS beat(4)-1.6%
Max EPS beat(4)10.88%
EPS beat(8)4
Avg EPS beat(8)0.76%
EPS beat(12)4
Avg EPS beat(12)-1.45%
EPS beat(16)8
Avg EPS beat(16)6.82%
Revenue beat(2)1
Avg Revenue beat(2)-1%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)0.33%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)2
Avg Revenue beat(8)-1.55%
Revenue beat(12)2
Avg Revenue beat(12)-1.99%
Revenue beat(16)6
Avg Revenue beat(16)0.34%
PT rev (1m)2.75%
PT rev (3m)-8.58%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-5.13%
EPS NY rev (1m)-0.32%
EPS NY rev (3m)-6.5%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-1.37%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)-2.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.93 | ||
| Fwd PE | 8.28 | ||
| P/S | 0.22 | ||
| P/FCF | 71.27 | ||
| P/OCF | 17.91 | ||
| P/B | 1.21 | ||
| P/tB | 5.03 | ||
| EV/EBITDA | 8.32 |
EPS(TTM)31.53
EY10.08%
EPS(NY)37.81
Fwd EY12.08%
FCF(TTM)4.39
FCFY1.4%
OCF(TTM)17.47
OCFY5.58%
SpS1413.93
BVpS259.62
TBVpS62.17
PEG (NY)0.86
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROCE | 9.81% | ||
| ROIC | 5.71% | ||
| ROICexc | 5.78% | ||
| ROICexgc | 7.59% | ||
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% | ||
| FCFM | 0.31% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexcg growth 3Y-22.88%
ROICexcg growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score5
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Debt/EBITDA | 6.75 | ||
| Cap/Depr | 114.61% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 23.32% | ||
| Profit Quality | 13.46% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 2.5 |
F-Score5
WACC8.93%
ROIC/WACC0.64
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
Revenue Next Year4.76%
Revenue Next 2Y5.5%
Revenue Next 3Y6.43%
Revenue Next 5Y7.69%
EBIT growth 1Y-2.36%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.38%
EBIT Next 3Y14.11%
EBIT Next 5Y11.53%
FCF growth 1Y111.82%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y166.36%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%